Illinois casino offers insight into what suburbs might expect

DES PLAINES, Ill. — The parking lot at Rivers Casino, the flagship of Chicago developer Neil G. Bluhm's Rush Street Gaming empire, was nearly full throughout a recent Wednesday. Toward 6 p.m., the traffic picked up with the after-work crowd and travelers from neighboring O'Hare International Airport.

Edward Guzdziol gave his wife, Anita, a kiss and the couple stepped out of their car.

"It's a gold mine for this town," Mr. Guzdziol, former mayor of the nearby city of Worth, told a reporter about the impact of Rivers Casino.

Although not regular gamblers, he said, "We came because they have a fantastic deal at the restaurant."

Since Rivers Casino opened two years ago in Des Plaines, 20 miles from the heart of Chicago, city officials and business leaders have declared it, by most accounts, a success.

The city received nearly $9 million in tax revenue last year from the casino, community organizations have benefitted from donations and partnerships, local businesses say they're seeing more activity and more than 1,400 employees have steady jobs with benefits.

But critics contend the city isn't getting the revenue it should from the casino, which is the most profitable in the state. And they say the developer, under the name Midwest Gaming & Entertainment, hasn't lived up to promises to build a hotel and invest more in Des Plaines.

A darker impact has emerged, too, for the roughly 1 to 3 percent of the population that is addicted to gambling. The upscale casino, with 1,200 games from slots to premium table games, restaurants and an entertainment venue, has made it more convenient and attractive than before to, as one critic said, "spin to extinction."

Rush Street Gaming is the parent company of Mass Gaming & Entertainment, the entity that pulled out of a proposal for a $200 million slots parlor in Millbury two weeks ago, a day after a Telegram & Gazette reporter returned from a visit to Des Plaines. A similar proposal for Worcester fell apart in June.

While the company is no longer a player for a Massachusetts casino license, unless it picks up another project at the last minute, lessons from Des Plaines' experience with Rivers Casino could easily apply to any casino coming to a mid-size, middle-class suburban community, including Milford or Leominster.

Milford faces a referendum on a resort-casino host community agreement with Foxwoods Nov. 19 and Leominster voters go to the polls Sept. 24 for a slots casino proposed by the Cordish Cos.

ROLLING THE DICE IN SUBURBIA

Des Plaines, population 58,840 lies northwest of Chicago. Its residents have a slightly higher median household income than the rest of the state, $63,528 compared to $56,576 according to the U.S. Census Bureau.

The city and developer competed fiercely in the past decade with two other communities for what was the 10th and final riverboat casino license in Illinois.

Under state law, casinos have to be on a body of water, although they don't have to leave dock or even be a boat. To comply with the law, Rivers Casino's gaming floor is built over a roughly foot-deep basin.

State Rep. Marty Moylan, a former mayor and alderman from Des Plaines, said that to make the bid attractive to the state Gaming Board, the city agreed to give the state $10 million a year for 30 years off the top of the casino's tax revenue, and then share 40 percent of the remaining revenue with 10 under-served, or "benefiting" communities.

In Des Plaines, he said, "We made a resolution the money would be used for infrastructure and to pay down debt."

State officials have since announced they may expand casino licenses by up to 50 percent, and in the past year video gaming has expanded to some bars and restaurants, which concerns the local community because their casino deal could leave the city with nothing if profits plummet from increased competition, according to Alderman James Brookman.

Mr. Brookman and others have also questioned the developer's appeals of their property valuation, which is assessed by Cook County. Although it's legal to appeal property taxes, lower valuations could reduce the city's tax revenue.

"In cases of large single taxpayers, like the casino, should the city have an interest? Should we contest it?" he asked. "I feel it's our fiduciary responsibility to be aware of this."

Des Plaines resident Walter Underwood, a banquet server in Chicago and a member of the union UNITE HERE!, which has been critical of Rush Street Gaming, said: "It doesn't seem right to me that he's (Mr. Bluhm) making billions of dollars and gets a big reduction. I have to pay more when he pays less… so he's not being a good neighbor to Des Plaines."

Despite concerns about open-ended obligations outside the city and debates about valuation, City Manager Michael G. Bartholomew is a fan of Rivers Casino.

"I think it's a great thing. It sort of put Des Plaines on the map. It helps bring business," he said.

Mr. Bartholomew said that before the casino arrived, the city was $109 million in debt and its fund balance stood at just 2 percent of revenue.

"They were on the verge where they had to borrow money just to make payroll," he said.

Of the nearly $25 million in gaming tax revenue generated by Rivers in 2012, Des Plaines reaped $8.9 million after paying $10 million to the state and $5.6 million to benefiting communities.

Now, he said, the city is $54 million in debt and has $24 million or so in its fund balance. And there's a budget proposal to allocate revenue from the past year to finding an alternate water supply, which would lower taxpayers' water bills.

Alderman Patricia Haugeberg said Des Plaines is fortunate to have the casino.

"It directly affects our taxpayers because we would have to get our money someplace," she said. "We're able to do more things. I think the casino has been a great asset to the city. Plus it's just nice to visit."

As for negative impacts, she said, "When you think of Las Vegas, you think of prostitution… No, it hasn't happened."

Police Chief William Kushner said that there was a 4 percent increase in radio calls attributable to the casino, compared to before, but virtually every one was tied to someone on the self-exclusion list for compulsive gamblers trespassing on the premises.

"The casino's a good neighbor," he said. "It's a good business to have in town. It's a high-visibility business."

And drunken-driving arrests have gone down over the past five years.

The only issue was at first, the Fire Department's radio communication wouldn't work in some parts of the casino. But that was fixed, he said.

"Right from the ground floor, find out who the director of security is from the casino and develop a relationship with them," the chief advised communities new to a casino. "They're looking for a return on their investment and they're looking to be a good neighbor."

COMMUNITY DEVELOPMENT

Part of the conversation between casino developers and host communities is commitments by the casino to invest locally.

Maria Kim, chief operating officer of The Cara Program in Chicago, which offers training and job placement for people in transition, is enthusiastic about Rivers Casino's partnership.

The casino has hired 14 graduates, with 87 percent of them staying in their jobs for at least a year. Four of the 14 have been promoted.

"For us, to have an employer that has 14 people is important," Ms. Kim said.

"I think the value is that there's a pathway to economic self-sufficiency," she said. "If this is a gateway toward that end, then Amen! I'm a convert."

Rivers Casino Director of Human Resources and Community Relations Kate McMahon said between community relations and the company's foundation, they gave almost $2 million, plus 8,500 community service hours, to community organizations and schools last year.

Martin Gardner, a banker and treasurer of the Des Plaines Chamber of Commerce and Industry, said local business has thrived since the casino opened.

"It gives a lot of opportunity for patrons to visit local businesses," he said. Gas stations, restaurants and hotels have seen an increase.

"They're going to see the much-needed improvements to the city," Mr. Gardner said about the economic benefits. "From a business standpoint, it's been a welcome attraction. It drives so much traffic."

He added that residential property values have been increasing, but it was hard to tell how much was because of the casino.

As an example of supporting local business, Rivers Casino General Manager Bill Keena pointed to the casino's Hugo's Frog Bar and Chop House, operated by a Chicago-area firm, Gibsons Restaurant Group.

"We want to buy local as much as we can," Mr. Keena said, noting that $2.7 million went to Des Plaines-based vendors in 2012.

PROBLEM GAMBLING

For all the economic and civic benefits of the casino, others wrestle with the personal, family and community impacts of gambling addiction.

According to Gene O'Shea, director of the self-exclusion program for the Illinois Gaming Board, people who know they have a problem controlling their gambling can sign up for the self-exclusion list.

A person on the list who is caught at a casino is given a $750 citation for trespassing and has to forfeit any winnings to a charity.

Once on the list, a person can petition to be removed after a minimum of five years, but they need an affidavit attesting to their "cure" from at least one licensed certified gambling addiction counselor, with a second opinion at the discretion of the board. So far, no one has gotten off the list.

"I tell people, consider this a lifetime ban," said Kathleen A. Rein, a clinical supervisor at The SHARE Program in Hoffman Estates, west of Des Plaines.

Ms. Rein said she's worked with gamblers in their 60s who have gone through their 401(k)s, with people facing foreclosures, domestic violence, depleted children's college funds, families split up and even incarceration from crimes related to gambling.

"The biggest impact casino gambling has had," Ms. Rein said, "since the casinos have come in, we've had more women gamblers than we've had before. It is so much more convenient."

She said women turn to slots machines in particular for "escape gambling," just them and the machine, while men gravitate to "action gambling" at table games.

"Casino gambling is what really, really pushed me over the edge," said Scott Damiani, from The Outreach Foundation for Problem and Compulsive Gamblers. "It made it a lot easier to drive half an hour than go a few times a year to Vegas."

After maxing out 14 credit cards, having to sell his house and attempting suicide because of his gambling problems, he went to Gamblers Anonymous.

Mr. Damiani hasn't gambled in 20 years, and he speaks with Ms. Rein at The SHARE Program.

Retired United Methodist Minister John Alan Boryk, a longtime casino opponent from Des Plaines, said: "Philosophically, governments are finding this an easy revenue stream. Much of the profit is from … problem gamblers. For those who can control it, fine. For many, they don't have that control."

Contact Susan Spencer at susan.spencer@telegram.com. Follow her on Twitter @SusanSpencerTG.